18 Jul Natural Building: Financing & Insurance

Design-Build-Live put on an excellent program at Treehouse this Wednesday. As a person deeply passionate about building radically “green,” it was encouraging to hear that the opportunities are opening up for funding and insuring green homes. As our speaker, Taylor King with Security National Mortgage Company (SNMC), explained, many rules and policies need to change to make the process comparable to conventional construction. From his decades as a green, healthy building consultant and home loan/mortgage officer, Taylor pointed out four major changes needed:

1. modified rules on how loans and mortgages are valuated from appraisal of built property and construction plans to underwriting and lending institution asset allocation,
2. standards for valuing green building features like the Home Efficiency Rating System (HERS) for energy,
3. new underwriting guidelines and
4. greater availability of lending institution liquid assets for green building.

Right now, however, it's certainly not impossible to build, or buy your dream green home. Here are a few resources and tips he shared:

Financing – The company he works for, SNMC, has specifically allocated a substantial amount of funds just for green building finance. They also have access to a network of appraisers trained in green building valuation. Appraisers hold the key! It's important to get someone who knows what they're doing when it comes to unconventional construction and other features. Additionally, green building features valuation calculators and green building training for appraisers can be found through Green Energy Money.

Insurance – The main two things to remember here were 1.) familiarize yourself (or find someone who is familiar with) the parts of the International Residential Code (IRC) that can be applied to green/natural building; and 2.) choose your words carefully. For example, “post and beam with cellulose fiber in-fill” is the appropriate IRC-supported language to use in describing straw bale construction. Similarly, adobe, or cob walls should be called “joisted masonry.”

Building codes – When it comes to green and natural building, often people choose to do it out in the county where there are essentially no building codes. If you choose to do it in the city, remember two things: 1.) Austin and most city building codes are based on the IRC, and 2.) it's best to have a licensed architect stamp every page of the building design.

Photo is of house with straw bale and cob walls.